European Bank for Reconstruction and Development says the summer’s political uncertainty caused a slight delay in its activities.
The European Bank for Reconstruction and Development may start investing in Egypt in November, following a delay due to a lack of clear political structure in the country, the bank’s officials said on Monday.
“We are working on Egypt…we would expect that to be completed and us to be able to invest in Egypt by November,” Hans Peter Lankes, acting vice president for operational policies at the EBRD, told a news conference.
The EBRD was set up in 1991 to help post-communist countries in Russia and eastern Europe develop market economies.
It extended its mandate last year to invest in Egypt, Jordan, Morocco and Tunisia following the Arab Spring uprisings in the Middle East and North Africa region.
The bank, which invests mainly in the private sector, announced its first investments in Jordan, Morocco and Tunisia last month.
Egypt’s first parliament, formed after the state’s uprising which ousted former president Hosni Mubarak last year, was dissolved in June after a court ruled that the laws upon which the parliamentary election was based were unconstitutional.
“The reason why Egypt is now a few weeks behind is simply because of the political situation in June, July, and August,” EBRD president Suma Chakrabarti told the news conference.
“We didn’t really have anyone to talk to at the time.”
The EBRD did not say how much it plans to invest, but last month it said it was preparing to invest up to 200 million euros by the end of the year in North Africa, and will increase its investments to 2.5 billion euros a year by 2015.
Investors have become more enthusiastic about Egypt in recent months after it restarted talks with the International Monetary Fund and was promised debt relief from the United States.
The IMF has delayed sending a team to Cairo to negotiate a $4.8 billion loan while the Egyptian government works to complete its economic reform programme, a newspaper quoted the country’s finance minister as saying on Monday.
The EBRD cut its growth forecasts for emerging Europe and North Africa in July, reducing them to 2.7 per cent in 2012 and 3.2 per cent in 2013.
The bank will publish new forecasts in mid-November.
The outlook for emerging Europe was worrying, Chakrabarti said, although deleveraging by western European banks from the region had become less severe.
“Growth and credit inflows are all slowing down into our eastern European region.”
Source: Ahram Online
